Each year, Americans spend an inconceivable amount of money during the holiday season. As we approach the holiday season, be conscious of your spending. Financially, do not undo your hard work and the sacrifices of the year. Do not veer off your path to financial independence. Be intentional in your spending.
Holiday Spending
The holiday season is the one time of the year where culturally, it is acceptable to spend what we do not have. In some cases, we are spending on people we do not like, and people we do not like to be around.
Studies have shown that it is not uncommon for a large percentage of people to not only overspend during the holiday season, but to spend to such an extreme that they are not able to pay off their sending in the month following the holiday season. In many cases, payment of the debt generated in the holiday season is carried over for a year or more.
Worst yet, much of the accumulated debt is on credit cards. According to wallet hub, the average credit card interest rate is 19.21% for new offers and 15.10% for existing credit cards.
Holiday Saving Tips:
Have a plan
Treat your holiday shopping like every other spending occasion. Evaluate where you are financially, know how much you are willing to spend, make a budget and stick to it.
Where Are You Financially
As the end of the year approaches, evaluate where you are. Do you have a savings or an investment goal? Did you plan to pay down debt? Are you planing to make a big purchase in the next year? These are all factors that should impact your spending. If you have goals, and you are on track, keep moving forward toward your goals. If you are off track, get back on track. Do not allow the holiday season to impede your progress.
Budget How Much You Are Willing To Spend
Once you have evaluated your financial position, determine how much you are willing to spend. Do not underestimate your possible budget, be realistic. Are you traveling for thanksgiving? Are you traveling for the winter break? Do your family members expect gifts? Have you set expectations? Are you hosting? Are you hosting a party? Budget accordingly.
It is not uncommon for us to not include the cost of travel in our budgets for the holidays, however, the vast majority of us travel during the holiday season. This is an important consideration especially with the increasing cost of air travel. Consider the cost differential of traveling to Time Square for new years eve vs watching the ball drop at home.
Whether for thanksgiving or later in December or for new years, consider the cost of travel, cost of gifts and any related recreation activities. Further, set expectations based on what you can afford.
Stick To It
Once you have reviewed your financials and made a budget, stick to it. Make travel arrangements early, take advantage of sales, set expectations and spend within your means.
Conclusion
As the holiday season approaches, continue on your journey to financial independence. Evaluate where you are financially, know how much you are willing to spend, make a budget and stick to it.
Follow me on Twitter @JoToFI_com
Follow me on Instagram @JoToFI_com
